Thursday, October 25, 2012

Snooze and Lose Your Investments

A few years ago, the Government
proposed a plan to utilize unclaimed dividends for first proposed - targeting these dormant funds and have them added to an existing (CMA) investor compensation fund

Shareholders of listed companies
duly approved these changes into their company rules, with a bit of debate at more
than a few companies annual general meetings (see Diamond Trust 2008 AGM)

Now there are daily ads in the
papers urging shareholders to step forward and claim
their past dividends before they are transferred,
not to the CMA investor compensation fund to a (Government) Unclaimed Financial Assets Authority.

Loose Notes at Blancos Restaurant

It gets even more serious
with the Barclays Bank of Kenya this wee which also added that the new rule would rope in, not just dividends unclaimed for
more than 3 years, but also

- Bankers cheques &
foreign drafts not presented for payment for over 2 years.

- Deposits held in bank accounts
that have remained dormant for over 5 years.

- Safe deposit boxes that
haven’t paid rental fees for more than 2 years.

This is an unfortunate adaptation of a well intentioned plan and
It seems there will be no recourse for shareholders who have
been incommunicado for what could be a simple reason of changing a post office box address. (Some people also abandon
bank accounts, leaving the funds to run out in lieu of formally closing the account
and incurring a (frivolous) bank account closure charge).

There are also dormant
'investor' funds frozen in bank accounts opened during the the pyramid scheme era that preceded the last election, but
the bulk of the idle funds could be due to cases of people who died without wills (and the
court are trying to sort out their estates) or other undetermined court cases in which
none of the parties can access the bank account funds.

Will the rule also extend to cooperative societies (Co-Op's), the contents of the safe deposit boxes, land companies, and private companies? Edit: Via Mark Mwangi, here's a link to the Unclaimed Financial Assets Bill.